Futures vs FV: SP +8.68 DJ +63.01; NASD +37.62
Futures are up in a relief bounce after being stuffed lower the past several sessions on trade worries. Even so, futures are off the highs by a bit post-import/export data. That data showed continued price moderation and even declines.
Imports, April: 0.2% vs 0.4% exp vs 0.6% March.
ex-petrol: -0.6% mo/mo, -1.0% year/year, lowest since 7/2016
Exports: 0.2 vs 1.0 exp vs 0.6 prior (from 0.7). Year/year 0.3%.
More trade: Trump--we will know in '3 to 4 weeks' if the trade talks are successful.
Trump also tweets if the Fed would 'match' any Chinese currency cuts, rate cuts, credit increases, the US would win the trade war 'game over.' Wow, it didn't take long for that call after I discussed what Trump would do in response to the market decline.
Bonds: As reported last night, the 3 month treasury yield is higher than the 2 yr, 5 year, and 10 year. The 5 year is below the 2 year. I have heard absolutely NOTHING on the financial stations about this inversion, the same one that occurred just a few months back. So, was it important then and not now, or was a 3 mo/10 year inversion truly not as important as a 2 year/10 year inversion? The latter is the case, but at that time there was panic in the financial markets so it was 'find a scapegoat' time.
Oil: SArabia says it is suffering drone attacks on its pipelines.
Earnings beats: RL (increases dividend); CYBR
Misses: TTWL (TL); TME (TL)
Upgrades: KO; TYSN
M&A: CMCCSA/DIS make HULU deal; S and TMOS are considering concessions in order to meet administration approval.
Bonds: 2.403% vs 2.403% 10 year. No outcry over this inversion this time.
EUR/USD: 1.1212, -0.0011
USD/JPY: 109.54, +0.24
Oil: 61.62, 0.58. S. Arabia reports drone 'terrorism' on its pipelines. US accuses Iran of attacks on SArabia oil tankers.
Gold: 1299.60, -2.20. Down a bit after the Monday surge.
Futures remain higher but are eroding as the open nears. From Dow futures around 130 to less than half that, the action shows the relief move is not that strong. It would have been best for the market to continue lower and complete the move to next support. Would not be surprised if this bounce didn't hold. That said, often when we feel the indices will surely continue the momentum to next logical support they find some bids. That is the case this morning, but as noted, not confident in it. Will still be watching the stronger areas such as software to see if they can make the rebounds, and will watch how consumer products perform -- they may be a bit weaker with money swinging back to the beaten down areas after the weakness.
Jon Johnson, Chief Market Strategist
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